Austin cuts minimum lot size by more than a third, requiring less land to build a home

More homes, less lawn.

This was the pitch made by Austin City Council members Friday when, for the first time in 80 years, they voted to lower the amount of land needed to build one house.

The change allows property owners to build a home on as little as 1,800 square feet of land. This is a far cry from Austin’s long-held minimum lot size, which required at least 5,750 square feet of land per single-family house.

“Creating giant, giant lots where everybody sprawls out … we’re all trying to solve that problem,” Council Member Paige Ellis said before the vote. The change, led by Mayor Pro Tem Leslie Pool, was dubbed HOME (Housing for Mobility and Equity) Phase 2.

Supporters of reducing minimum lot size hope it can entice property owners to build additional homes on their lots or carve up and sell off land. It has been marketed as both a way to build more homes in central neighborhoods and for current homeowners to create additional income.

The vote was 9 to 2, with Council Members Alison Alter and Mackenzie Kelly voting no. The decision came after a long day Thursday, where hundreds of people spoke for and against lowering the minimum lot size. By the time Mayor Kirk Watson ended the meeting at 1 a.m., those opposed had made clear their fears: making it possible to build more housing in central neighborhoods could sacrifice the look and the people living on these blocks.

Friday’s vote represents a notch in a long campaign to change Austin’s zoning rules. Elected officials have increasingly turned to land use amendments as a way to stunt swelling home prices. Since the 1980s, the city has accommodated its growing population by expanding its boundaries, doubling the geographic size of the city. The new solution is simple but contentious: make it possible to build more homes where they already are.

The goal: build more homes

Austin got its first minimum lot size restrictions in 1931. City leaders decided a single-family home needed to sit on at least 3,000 square feet of land. By 1946 that number had grown to 5,750 square feet, and it would remain the standard for nearly 80 years. These restrictions not only ensured residents of single-family neighborhoods got a slice of yard, but also that as the population boomed in the ensuing decades the city grew to look more like a suburb than a metropolis.

During Thursday’s public hearing on minimum lot size, attendees championed each other’s testimony, clapping and cheering, while at times booing and, in at least one case, cursing at people whose testimony they disagreed with.

Michael Minasi/ KUT News. An audience member holds a sign reading “Mayor Watson, Don’t Sell Out Austin!” as Austin City Council hears public comments before voting on HOME Phase 2.

Land use changes have always been contentious in Austin. For more than a decade, the city has tried multiple times to amend its land development code, last rewritten in 1984.

The latest attempt, an iteration of which was dubbed CodeNEXT, failed in 2020 when a group of homeowners successfully challenged the city in court. These same homeowners also beat the city in lawsuits over several other housing policies. The lawyer representing them said in December he was looking at potential legal grounds over which to halt more recent changes.

Until another court challenge, city leaders have moved forward. Nearly 300 people signed up to testify Thursday about the minimum lot size changes. The split was almost even, with about two dozen more people speaking against than for.

A retired elementary school teacher in her 70s, Susan Wetmore, called in by phone. She told council members she lives in a small apartment and spends more than 40% of her monthly fixed income on housing.

“Your approval of HOME Phase 2 would allow my daughter to put a small additional home on her property for me to move into as I age,” Wetmore said. “Living so close to my daughter will allow me to be cared for by my family.”

If a homeowner in Austin has 8,000 square feet of land, which is close to the median lot size in the city, they could theoretically carve it up into four pieces of land. They would be permitted to build one home on each. Because of width requirements, though, city staff estimate it’s more likely a property owner would be able to divide their land into only two or three plots.

In addition to reducing the amount of land needed to build a home, the council also voted to amend compatibility rules. These restrictions limit how tall a building can be within a certain distance of a single-family home or a piece of land intended for single-family use. Since the 1980s, that distance has been 540 feet, or the length of one and a half football fields. Council members lowered this to 75 feet, meaning a structure can gradually increase in height within this distance.

The vote on Friday comes just months after another big zoning change. In December, council voted to let property owners build more homes on single-family lots. Since then, the city has received 62 applications to build under these new provisions, according to data compiled by a city department and shared with KUT. Roughly 11% of these applications include the demolition of a current home.

Both phases of HOME represent an attempt to get more housing and different kinds of homes built in a city where rents and home prices generally know no direction but up. Between 2020 and 2023, the average price of rent in the Austin area rose 25%. Prices have since begun falling, though not nearly as quickly as they rose, in part because of a boom in apartment construction. A trove of research suggests building more housing helps slow rising costs and even brings them down.

In 1998, Houston lowered its minimum lot size in a portion of the city. UT Austin researchers looked at more than a decade of redevelopment, where single-family homes were replaced with townhomes on smaller plots of land. They found that when roughly 1,300 single-family homes were replaced with about 5,300 townhomes, those new homes were larger and cheaper than the median sales price of new single-family homes in the city.

Researchers also found that redevelopment was less likely to happen in majority Black neighborhoods, but more likely to happen in neighborhoods with high home prices and fewer college-educated people. In Houston, blocks were allowed to opt out of townhome redevelopment, a provision not included in Austin’s revision and something opponents have asked council members to include.

Opponents of minimum lot size change worry that in the process of building more housing, people could be displaced to make room for it. Those who came to City Hall to speak against the change Thursday held signs that read, “Mayor Watson, don’t sell out Austin!!!” They stayed late into the night, also testifying against several other land use changes on the agenda, including a plan to encourage more development near future public transit lines.

Michael Minasi/ KUT News. City Council voted to study whether it should allow some of Austin’s lowest-income communities to opt out of these changes.

The concern is this: If someone can build more on a piece of land, they can reap more profit. That potentially raises the value of that land and incentivizes the property owner to sell. If renters live on this land, they could be forced to move. In a city where housing affordable to people making less than the median family income is difficult to come by, opponents said, some of Austin’s lowest-income residents could be forced to move.

“We’re not against density. We’re against density without protection for the most vulnerable communities,” said Iliana Medrano, a graduate student in social work at UT Austin. Researchers in California found that when new housing is built on a block there is a slight increase of people of all incomes moving in and out of that neighborhood. They also note a small but increased likelihood (1% to 2%) of people earning low incomes moving out.

Medrano and dozens of others urged the council Thursday to require people building new housing as a result of the minimum lot size change to set aside a portion of what gets built for families earning low incomes. They also called on council to pass what’s been called an equity overlay. This would allow some of Austin’s lowest-income neighborhoods to opt out of these changes, an idea forwarded by the organization Community Powered ATX.

On Friday, the council voted to have staff study what this policy could look like. The council also voted to delay the new minimum lot size rule by six months in neighborhoods where gentrification is currently happening and where residents are more susceptible to displacement.

Sell off your backyard

Mayor Pro Tem Pool has repeatedly pitched the second phase of HOME as a way for homeowners to stay in place while also adding more homes to the city. The idea is that people could carve up their lots and sell off the land or build smaller homes on it.

A similar policy idea has been included in several reports as a strategy to let low- and middle-income homeowners use the land they own to help them stay financially afloat.

In a 2018 report, UT Austin researchers wrote that once a homeowner had divided their land, they would “have the ability to sell one of the resulting parcels (perhaps a portion of the backyard) to a homebuilder, who could then build a small house.” Researchers also suggested the policy could grant the city or a nonprofit first dibs on buying this new piece of land, something the council did not discuss.

The idea of subdivision as a financial buoy for homeowners has faced criticism from opponents who question how some lower-income residents could afford to subdivide their land and build or sell it off. Subdivision requires paying city fees and navigating a permitting process, one that builders say can cost tens of thousands of dollars and take up to a year.

“I had hoped that those who disagreed or had criticisms would hear the approach, the concept that this was for middle-income people, for people who own property, to make the decision themselves if they want to add a unit,” Pool told KUT in an interview days before the vote. “Nobody’s making anybody do anything.”

On Wednesday, Council Member Velásquez and some of his colleagues announced they would vote later this month on whether to ask staff to look into a program offering low-interest and forgivable loans to property owners interested in building more homes on their land. If passed, city staff would be asked to come back with a report on the feasibility of a program like this by October.

If council had not voted to lower its minimum lot size Friday, it’s possible state lawmakers would have done it for them. Last year, legislators filed bills that, if passed, would have forced large cities to loosen their zoning rules — including lowering minimum lot size. Lawmakers have suggested they’re interested in bringing back similar bills during the next legislative session.

This story was produced as part of the Austin Monitor’s reporting partnership with KUT.

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